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US CANADA Gold, Taxes, Immigrant trusts, and Permission for Permanent Residency



We currently have cash assets held in a GIC in Canada.  We
are US citizens in the final stages of being granted
permission for permanent residency in Canada.  After we
receive our PPR, we will likely wait about 18 months
before we make our complete move to Canada (We'll land
before then, but then return to US to finish my contract). 
We would like to use an alternate investment vehicle than
our currently held GIC.  We predict an inflationary marekt
and want to pull money from the GIC to invest in gold
bullion.  We would like to take advantage of the tax
shelter that may be available to us when we transit to

Would it be better for us (in regards to taxation), if we
bought gold bullion in Canada and held it in a Canadian
bank, or would it be better to buy gold bullion in the US
and bring it  across the border when we officially move, or
at a later date via an immigration trust.  I'm under the
impression that if we bought gold state-side, held it here
for 5 years, and then brought it into Canada, we would
"reset" the original purchase value of the gold bullion to
whatever its calculated value is at the time of import?  I.e.
the gold bullion's value at the time of import to Canada
would be used, not the original value at the time of
purchase?  Would this be a true tax-free benefit that could
be realized by the sale, in Canada, of the bullion
immediately after its import?  For example

In the US, in 2007, buy bullion assets worth $10,000
in 2012 import the US bullion assets to Canada with a new
appraised valuation of $15,000
in 2012 sell the bullion assets in Canada at the price of
Net $5,000 profit (when calculated against original
purchase in 2007)
But net $0(zero) capital gains under Canadian tax law as
the asset was sold for the same value that was assigned to
it at the time of patriation.

In other words, capital gains of an asset (including bullion)
are calculated by comparing the value at the time of
patriation with the value at the time of sale.  Capital gains
is NOT calculated by comparing the the value of the asset
at the time of original purchase (in the US) with the value
at the time of sale in Canada.

Is this correct?


david  ingram replies:   If the gold goes up in the trust, you would be correct.  However, if you had done it five years ago, your $15,000 US of gold would be worth one-third less because of the decline in the US dollar.  Most Immigrant trusts have lost money in the last five years if denominated in US dollars.

I tend to stay away from Immigratiojn trusts brcause i have seen several of them broken by the CRA (Canada Revenue Agency) when the CRA decides that the trust was not correct.

Also, since I specialize in US Canada tax situations, Having an immigration trust does not escape much, much, if any tax becasue as a US citizen, you are still taxabl;e in the US on any earnings in the Trust and it must be reported on forms 5471 and TDF 90-22.1.

The following older answer may help you.

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Subject:        Pre immigration tax planning
Expert:         [email protected]
Date:           Wednesday June 06, 2007
Time:           08:20 PM -0400


Hello David

I have been granted permanent residence and will be immigrating to Canada from the UK in mid July 2007.

I am wondering whether there is any point in looking into establishing a Canadian Immigrant Trust before I arrive in Canada - the theory sounds good, sheltering income generated outside Canada from Canadian income tax for the first 5 years as a Canadian resident. However all of the information I seem to come across appears aimed at high net worth individuals (ie over 1m canadian dollars).  I unfortunately am not in this category. I do consultancy work in the UK through a limited company, and do have a decent sum sitting in the UK limited company that I have not yet dividended to myself. My original thought was to transfer the company into an immigrant trust and then dividend the money into the immigrant trust. However, I want to use this money to put toward purchasing a residence in Canada - if the trust pays me money after I become Canadian resident, am I liable to Canadian income tax on this because it is counted as income? If this is so, then I might as well dividend the
money to myself before I leave the UK, pay UK tax on it, and then just transfer the money over? I cannot seem to find any information on the set up and administration cost of such a Canadian Immigrant trust.

I also require some advise on the timing of sale of my UK residence if I decide to sell after becoming settled in Canada. I am not planning to sell in the UK at present, and aim to go cheap and cheerful on Canada property for the first few years. I may, however, after becoming settled, decide to sell in the UK and use the proceeds to buy a princial Canadian residence. Do I have to pay UK or Canadian capital gains tax on the property? The UK house will be rented while I am settling in Canada. Is there any point considering transfering the UK property into a Canadian Immigrant Trust?

Getting the visa seemed straightforward compared to looking into tax planning issues.

Thanks for any advice you may have
david ingram replies:

The Furthest I have biked is 350 miles from Winnipeg to Regina in 1960, five years before you were born. Your experience, training and amazing fortitude indicate to me that 'you' should likley beocme the world expert on Immigrant Trusts.

You have not said where you were moving to in Canada and the differences from Signal Hill to Victoria are immense as you know.

If I were you, I would make every effort to buy when you get here if you are coming to Alberta or BC.

If you are going anywhere else, i would hold back before buying.

Your house becomes revalued for Canadian Tax purposes when you enter Canada.  From that point, any gains are potentially taxable but because it was your principal residence, you 'do' have the right / ability to claim any capital gains to be tax free for the first 4 years 'if' you file an election to claim it as your principal residence under section 45(2) when you file your first Canadian Income Tax with the UK rent reported on form T776.

Canada taxes on mind and control. Therefore, your UK corporation must file a Canadian Tax return in Canda because its mind and control will be in Canada.  However, its value for Canadian tax purposes will be its worth the day you enter Canada as a PR.

I do not know what is going to happen in the future.  When you were here in 2003, the American dollar was worth $1.50 Canadian.  Today, it is worth about $1.04 Canadian.  At the same time, a house in Edmonton, Calcary, Victoria or Vancovuer has doubled in value.  Winnipeg, Regina, Saskatoon and most other cities in Canda have increased 50%.

I have no guarantee that it will happen again but i would be inclined to dissolve your UK corporation (less trouble), pay the tax on the dividends, and bring what is left to Canada and buy your accomodation.  If the property continues to increase in value, you will be a way better off.  If it stays level it does not matter and if it goes down in value for a while, it still does not matter because it is bound to increase again.

However, if you do not buy and property goes up $80,000, you have to earn $130,000 and pay $50,000 in taxes to make it up without paying any interest. 

Barring a nuclear holocaust (Chernobyl ??), Real estate in Western Canada is not likely to collapse in teh near future, and yes, I am aware that you feel you are a Chernobyl victim. Can it hit twice?

The following will give a slight indication of my feeling about immigrant trusts in general. 

Since any money you take out 'is' taxable in Canada and you will likely need funds out of the trust, you have to have close to a million in my opinion to make it worthwhile.  sorry, I did not mention PW in the following.  It was not on purpose, just did not name EVERYONE.

[CEN-TAPEDE] Immigrant Trusts, KPMG, Deloitte Touche, ask international income tax & immigration expert consultant david ingram from North Vancouver, BC, Canada experts on RRSP RESP IRA 401(K) radio CKBD 600AM 9 AM Sunday mornings on Fred Snyder's IT's YOUR MONEY

centapede at centapede at
Wed Aug 10 11:46:49 PDT 2005
QUESTION: We have just received our permanent residency to move to Canada
from England.I would like to put 90,000 pounds into a guernsey offshore
account.This is because the interest rate is 5.10 percent.When living in
Canada when i send my tax forms in would i have to mention the ineterest i
made on my tax form.Whether i bring the money into Canada or leave it still
in the account. The interest would be equivalent to 10,000 Canadian
dollars.And if i was taxed on this,what would be the percentage.

david ingram replies:

New Immigrants to Canada are allowed to set up a five year immigrant trust
which allows them to accumulate money within the trust tax free for that
five year period.

However, the Canada Revenue Agency (CRA) has a bad habit of breaking the
trusts. In the last two years I have had two South Africans with $400,000
and $1,000,000 tax bills because the CRA deemed that their immigrant trusts
did not qualify.

I doubt that it is worth your effort for 90,000 pounds as the setting up and
management fees would be equal to the amount of tax you would save.

The tax on $10,000 Canadian split between two spouses will depend upon what
other income they have.

Our marginal tax rates are approximately

25% on amounts under $35,000

30% from $35,000 to $60,000

35% from $60,000 to $100,000

40% from $100,000 to $120,000

44% over $120,000.

Every province and territory (13) has a different local tax rate so there
are likely 60 different figures.

The foregoing is very approximate but is sufficient for you to figure out an
approximate tax on $10,000.

If you are going to deal with the concept of an Immigrant Trust, do NOT deal
with someone you find with an Immigrant Trust website. My suggestion would
be to consult with one of the BIG International Accounting Firms such as
KPMG, Deloitte, etc.
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Canada Non-Resident in Panama and Withholding Tax T1161, T1243, T1244 - Dennis Lee Case, Judge Teskey decision

My husband and I are from Canada and are now living in the Republic of
Panama and plan to retire here. We have been in Panama since December 21st
of 2006 and I understand that as of Dec. 21st 2007 we will be considered a
non-resident of this correct. We have taken out an application
for the Pensionado program for retiree's here in Panama and are becoming a
resident of Panama. Since we are no longer a resident in Canada we have
been told that CRA will take a 25% Withholding Tax from both our private
pension's. Is this true and is there anyway of claiming this 25% back. We
thought we would not have to pay any taxes in Canada once a non-resident nor
have to file income tax forms at all. Another thought is a friend mentioned
that if you are a non-resident in Canada you cannot even own a Credit Card
with a Canadian bank...well our Pension company told us they cannot send the
Pension funds to Panama that we have to keep a Canadian Bank account open
for them to drop the pension funds into the Canadian bank account. Also, is
there a specific form that one has to fill out to officially become a
non-resident, non-tax payer in Canada with CRA.

Thanks for your help with these questions...

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My_question_is: Canadian-specific
Subject:        Thinking of moving to Dubai to work for government from Canada
Expert:         [email protected]
Date:           Saturday March 31, 2007
Time:           11:25 AM -0500



I have been bantering back and forth with a possible offer to work for the government of Dubai.. if I do accept the offer and go, I want to keep my condo and my car here in Canada... I will establish a residence there as well.. my question is how much tax will I have to pay out of my income from over there.. I do not wish to sell everything and put it in storage... the car maybe, but it is a lease and I don't currently own it.. but Dubai is ready to take care of my obligations here, so I say keep it.

Thanks for your time

david ingram replies:

If you keep a car and home here and return for visits, you will be taxable at full rates on whatever you earn in Dubai.

read the following:
So what are the rules?

Well, to leave Canada for tax purposes, you must give up clubs, bank accounts, memberships, driving licences, provincial health care plans, family allowance payments(Child Tax Benefits)  (if you are a returning resident, you can continue to get Family Allowance out of the country), your car, and furniture. You can keep a house here as an investment and rent it out, but it must be rented on lease terms of a year or more. And you MUST have an agent sign an NR6 for you (see example). This NR6 has the Canadian Resident AGENT ** guarantee the Canadian Government that if YOU do not pay your tax to Canada, the AGENT WILL. Even after fulfilling the foregoing, the Canadian government can still tax you or "try" to tax you on your income out of the country. If you are being paid by a Canadian Company, they can quite often succeed.

Even though you can collect family allowance out of the country, don't! One client's wife found out that she could get family allowance out of the country if she said they were coming back to Canada. She got some $3,000 of family allowance and cost the family some $80,000 in income tax when they came back to Canada from Brazil. I will never forget the husband's expression when he found out why he had been reassessed and I will never forget his wife's explanation. She said he was a skinflint and never gave her any money. The total episode cost them their house.

** The "agent" referred to above can be a friend, relative, or a business such as ours. We charge a minimum of $40.00 per month to be an "AGENT" for an NR-6 filing. This $480 per year is "in addition" to any other fees but "well worth it" of course. It stops your mother, father, brother, next door neighbour or ex-best-friend from being plagued by paperwork they do not understand.


It is possible to be physically "in Canada" and be treated as a Non-Resident and it is possible to be out of the country for seven years, or never have even lived in Canada, but wanted to, and be taxed as a Canadian resident as the following three cases show. In case you missed it, the reason for the different rulings is the "INTENT" of the parties involved.  Wolf Bergelt intended to leave Canada.  David MacLean was only working out of the country.  He still maintained a residence and could not ever become a resident of Saudi Arabia anyway. Dennis Lee "wanted" to live in Canada.

In 1986, Wolf Bergelt won non-resident status before Judge Collier of the Federal Court, even though he was only out of the country for four months and his family stayed behind to sell his house. He had given up his memberships, kept only one bank account and rented an apartment in California until his house in Canada was sold. Four months after his move, his company advised him that he was being transferred back to Canada. Judge Collier said his move was a permanent (although short) move and he was a non-resident for tax purposes for those four months.

In 1985, David MacLean lost his claim for non-residence status even though he was gone for seven years. He kept a house and investments in Canada and returned a couple of times a year to visit parents. He had even been to the Tax Office and received a letter on January 29, 1980 stating that his Canadian Employer could waive tax deductions because he was a non-resident. However, he did not advise his banks, etc. that he was a non-resident so that they would withhold tax, he did not rent his house out on a long term lease and he did not do any of the things that makes a person a "NON-RESIDENT". Judge Brule of the Tax court of Canada said that he thought Mr. MacLean had stumbled on the non-resident status by chance rather than by design. In other words, to become a non-resident of Canada, you must become a bone fide resident of another country.  As a rule, only a Muslim born in Saudi Arabia to Saudi Arabian parents can become a Saudi Arabian citizen.  The best that David MacLean can hope for is that he has a Saudi Arabian temporary work permit.

In other words, when a person leaves a place, they usually leave and establish a new identity where they are because the "new place" is where they live now. Trying to "look" like a non-resident is not the same as "BEING" a non-resident - think about it.

In 1989, Denis Lee won part but lost most of his claim for non-resident status. He was a British Subject who worked on offshore oil rigs. He maintained a room at his parents house in England and held a mortgage on his ex-wife's house in England. For the years 1981, 82 and 83 he did not pay income tax anywhere. in 1981 he married a Canadian and she bought a house in Canada in June of 1981. On September 13, 1981, he guaranteed her mortgage at the bank and swore an affidavit that he was "not" a non-resident of Canada. [As I have said in the capital gains section of this book, bank documents will get you every time.] During this time he had a Royal Bank account in Canada and the Caribbean but no Canadian driver's licences or club memberships, etc.

Judge Teskey said:

"The question of residency is one of fact and depends on the specific facts of each case. The following is a list of some of the indicia relevant in determining whether an individual is resident in Canada for Canadian income tax purposes. It should be noted that no one of any group of two or three items will in themselves establish that the individual is resident in Canada. However, a number of the following factors considered together could establish that the individual is a resident of Canada for Canadian income tax purposes":

  • - past and present habits of life;

  • - regularity and length of visits in the jurisdiction asserting residence;

  • - ties within the jurisdiction;

  • - ties elsewhere;

  • - permanence or otherwise of purposes of stay;

  • - ownership of a dwelling in Canada or rental of a dwelling on a long-term basis (for example, a lease of one or more years);

  • - residence of spouse, children and other dependent family members in a dwelling maintained by the individual in Canada;

  • - memberships with Canadian churches, or synagogues, recreational and social clubs, unions and professional organizations (left out mosques);

  • - registration and maintenance of automobiles, boats and airplanes in Canada;

  • - holding credit cards issued by Canadian financial institutions and other commercial entities including stores, car rental agencies, etc.;

  • - local newspaper subscriptions sent to a Canadian address;

  • - rental of Canadian safety deposit box or post office box;

  • - subscriptions for life or general insurance including health insurance through a Canadian insurance company;

  • - mailing address in Canada;

  • - telephone listing in Canada;

  • - stationery including business cards showing a Canadian address;

  • - magazine and other periodical subscriptions sent to a Canadian address;

  • - Canadian bank accounts other than a non-resident account;

  • - active securities accounts with Canadian brokers;

  • - Canadian drivers licence;

  • - membership in a Canadian pension plan;

  • - holding directorships of Canadian corporations;

  • - membership in Canadian partnerships;

  • - frequent visits to Canada for social or business purposes;

  • - burial plot in Canada;

  • - legal documentation indicating Canadian residence;

  • - filing a Canadian income tax return as a Canadian resident;

  • - ownership of a Canadian vacation property;

  • - active involvement with business activities in Canada;

  • - employment in Canada;

  • - maintenance or storage in Canada of personal belongings including clothing, furniture, family pets, etc.;

  • - obtaining landed immigrant status or appropriate work permits in Canada;

  • - severing substantially all ties with former country of residence.

"The Appellant claims that he did not want to be a resident of Canada during the years in question. Intention or free choice is an essential element in domicile, but is  entirely absent in residence."

Even though Dennis Lee was denied residency by immigration until 1985 (his passport was stamped and limited the number of days he could stay in the country) and he did not purchase a car until 1984, or get a drivers licence until 1985, Judge Teskey ruled that he was a non-resident until September 13, 1981 (the day he guaranteed the mortgage and signed the bank guarantee) and a resident thereafter.

My point is made. Residency for "TAX PURPOSES" has nothing to do with legal presence in the country claiming the tax. It is a question of fact. My thanks to Judge Teskey for an excellent list. The italics are mine and refer to the items which I usually see people trying to "hold on to" after they leave and are trying to become non-residents. No single item will make you a resident, but there is a point where the preponderance of "numbers" leap out and say, "He / She is a resident of Canada, no matter what he / she says." 

The case above is not unusual in any way. It is a fairly typical situation in my office.

In 1990, John Hale was taxed as a resident on $25,000 of directors fees he had received from his Canadian Employer and on $125,000 he received for exercising a share stock option given to him when he had been a resident of Canada (the option, not the stock). Judge Rouleau of the Federal Court ruled that section 15(1) of the Great Britain / Canada Tax Convention did not protect the $125,000 as it was not "salaries, wages, and other remuneration". It was, however a benefit received by virtue of employment within the meaning of section 7(1)(b) of the act.

Even a car you do not own can make you a resident as the next sailor found out.

In 1988, FrederickReed was claimed by the Canadian Government as one of their own. He lived on board ship and shared an apartment with a friend in Bermuda but only occasionally. He also stayed with his parents in Canada when visiting his employer in Halifax. Judge Bonner of the Tax court ruled that he could not claim his place of employ or the ship as his residence and just because he did not have a fixed abode, did not make him a non-resident. He was also the beneficial owner of a car in Canada which even though of minor consequence, served to add to his Canadian Residency. He had in fact borrowed money from a credit union to buy the car, even though it was registered in his father's name. He had maintained his Canadian Driver's licence as well.

An interesting case in June, 1989 involved Deborah and James Provias who left Canada in October of 1984. They had sold a multiple unit building to James' father on September 21, 1984 but the statement of adjustments did not take place until December 1, 1984. They tried to write off rental losses and a terminal loss against other income as `departing Canadians'. Judge Christie of the Tax Court ruled that they had left before the sale and were not entitled to the terminal loss or another capital loss as these could only be applied against income earned in Canada from October 13, 1984 (the day they left) to November 30, 1984 (the day before the sale) and there was no income, only a rental loss.

But June, 1989 was a good month for Henry Hewitt. He had been a non-resident living in Libya for four years and received some back pay after returning to Canada. DNR tried to tax him on the money but Judge Mogan of the Tax Court came to the rescue. He ruled that although Canadians were usually taxable on money when received, that assumed that the money itself was taxable in Canada, which was not true in this case.

In 1989, James Ferguson lost his claim for non-residency status but from the information, it didn't stand a chance anyway. He had been in Saudi Arabia on a series of one year contracts for four years. His wife remained employed in Canada, and he kept his house, car, driver's licence, union membership, and master plumber's licence. Judge Sarchuk ruled that he had always intended to return to Canada and was a resident.

A similar situation involved John and Johnnie M. Eubanks in the United States. He was working on an offshore oil rig in Nigeria with a Nigerian work permit and attempted to claim non-resident status for the purposes of exempting the foreign earned income exclusion. His wife was in the United States at all times and because he worked 28 days on and 28 days off, he returned to the U.S. for his rest periods using 4 days for travel and 24 days for rest with his family. He did not spend any 330 day period (out of a year) in Nigeria and only had a residency permit for the purposes of working in Nigeria. Judge Scott ruled he was a resident of the U.S. and taxed him some $20,000 with another $6,000 penalties and interest.

The Tax departments in Canada and the U.S. issue Interpretation Bulletins and Information Circulars and Guidance Pamphlets. These documents sometimes get people in trouble because the individual reads the good part and doesn't pay any attention to the exceptions. The following case ran contrary to a Guidance Pamphlet issued by the IRS.

On and Off-shore Oil rigs were involved with William and Margaret Mount and Jesse and Mary Wells. William and Jesse worked in the United Arab Emirates. However, they kept their homes and families in Louisiana and kept their driver's licences in Louisiana and voted in Louisiana. No evidence was shown that they had tried to settle in The United Arab Emirates. Judge Jacobs turned down claimed exclusions of approximately $75,000 each.

There isn't any question about what oil rig people talk about on oil rigs. It has to be "how to beat the tax man". Unfortunately, they all seem to think it is easy. Another such story follows.

In 1989, Clarence Ritchie found out that bona fide residence means just what it says. You cannot be a non-resident of the U.S. for tax purposes if you are not a bona fide resident of another country. He was working on the Mobil Oil Pipeline in Saudi Arabia and although when he left he was married with a couple of kids, by the time he returned permanently, he was a happily divorced man. Judge Scott ruled that though he did not have an abode in the United States, he had not established one in Saudi Arabia and therefore was not entitled to the foreign earned income exclusion which requires you to be away for 330 days out of 365. He had worked a 42 days on, 21 days off schedule and usually returned to the U.S. for his days off although he did spend time in Tunisia, England, Italy and Greece.

On a final note, as explained on page 143 of the "PINK" 17th edition of my ULTIMATE TAX BOOK, it is possible to have three countries after you for tax. If you are thinking of taking a job because a recruiter told you the money is tax free, think twice and check three times with competent individuals about what the rules "really are". No government likes giving up the right to tax its citizens.


Non-residents of Canada with investments in Canada are subject to a 25% non-resident withholding tax on any money paid to them while they are out of the Canada. Therefore, if they have $10,000 in the Bank of Montreal and they live in Argentina, The Bank of Montreal, Royal, Bank of Nova Scotia or any other financial Institution must withhold 25 cents out of every dollar of interest paid to the account. Most tax treaty countries such as Great Britain, Germany, the United States, and Australia have a reciprocal agreement with Canada that limits the withholding to 15%.

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US CANADA Bringing Canadian Money to US or US to Canada 0 E667 E677 104 105 reporting forms

I just saw a question you answered about a Canadian living in the US as a permanent resident selling a home and wanting to transfer the money to a US bank. ( I'm in the same situation, except I want to keep most of the money in Canada. You said, below, that the banks will notify the treasury on amounts over $10,000. Is this $10,000 at any one time, or per calendar year?   What I want to do is bring enough money to pay off my US credit cards. Through several bank withdrawals and cheque deposits I've already put about $9600 Canadian into my US bank (not at the same time) to pay bills. Do I need to wait until next year to bring more in, or is it okay to continue doing this? I would need maybe another $11,000 to pay everything off here.   Thanks!       ------------------------------------------------------------------------------------
david ingram replies:

If you have transferred $9.600 so far and have paid it out already, there is no problem.  If you are transferring smaller amounts because you are trying to amass an amount over $10,000 for a single purpose, then you have to report the transfer of more than $10,000 AND the financial institution you have transferred the money to in the USA should be reporting the transaction as well.  In fact making several transfers for a total of $12,000 could make you look like a suspicous person whereas one $15,000 transfer would never raise a suspicious person report, especially if the money was then paid out to credit card companies.

The rules for reporting take place for both countries when there is a transfer (or series of transfers) of more than $10,000.

If you do it as a bank transfer, you do not need to worry.  The bank will do the reporting for you.

If you take cash out in Caanda and take it across the border yourself, YOU have to do the reporting to both countries.

This older series of questions will help

  This last question just gave me an idea for a new question:   What if I bring say $15 000 US into Canada but I do it at several trips and every time I carry less then $10 000 (3000-5000)? Any  forms to fill or report? Thanks.   PxXXXX

-------- david ingram replies:   Both countries make the transportation of more than $10,000 in pieces a crime as well.  

However, if you were sending a $1,000 a month to a savings plan or something, that would not matter.
  The crime would be trying to assemble the more than $10,000 in the other country when you had the ability to send it all at once.  

I.E.  You have $25,000 in a bank in Seattle and send $5,000 every couple of days until it is all in Canada.   

In that case, if your banks spotted what was going on, "they" would report you.  

The bank will also report when several cheques arrive from different sources and they add up to significant amounts whether the source is from the US or not.  This is to stop people from keeping their money in other people's accounts and assembling it when they need it.  

All part of anti money laundering legislation.

The original question and answer follows

What forms do I have to fill  out if I am transporting more than $10,000 across the Canadian Border

david ingram replies:  The forms are  E677 and E667 for Canada and as of September 1, 2004 )today)  104 and 105 for the US if you are bringing the money out of the US into Canada.. 

The US bank will report the deposit or withdrawal to the US FINCEN on form 4789 (which is still valid until August 31, 2004) or more likely the new form 104 which you can find at:

When you then move the money to Canada by money order or check, the bank or financial institution will report it again.

The US penalties for failure to fill in these simple forms is up to $500,000 PLUS 5 years in jail.
  If you remove more than $10,000 at any one time, the bank will report those transactions as well.   If you decide to carry the cash or transport it out of the USA as a cashier's cheque, you have to file form 105 (old form 4790). 

You can find the form at:
  Canada has moved its forms in the last few days and i had a devil of a time trying to find them. 

You can find both E677 and E667 below.  

E667 is filled out by yourself and E677 is filled out by the financial institution.
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owns several small apartment buildings

Hi David,


I had a phone appointment with you in June regarding an apartment building I was purchasing in xxxxxx, xxxxxxx. The call was short, about 20 minutes, and you told me I could contact you again if I had any further questions. I don’t expect you remember me, but we also spoke at some length about autism (I have a young autistic son) and you suggested a therapy by a friend of yours in Vancouver which I am looking into.


My questions relate to the apartment building:


1)       I purchased it in xxxxxx (8 units) and am wondering how I claim the appraisal fee, the building inspection fee and the lawyers fee on my tax return.  

2)       How do I calculate CCA and is it beneficial to claim CCA each year?

3)       How is CCA treated when I sell the building?


I am just about to close on another building in xxxxxxx (4 units) in 2 days. This brings me to a total of 12 units. I am looking to buy 2 more buildings bringing the total to 18 – 20 units, in 4 separate buildings. The rental income covers all mortgages and expenses, and also produces an income for me each month, presently $500 increasing to $1000 with the purchase of the additional buildings.


I do not want to become a corporation or a business. I am concerned that CCRA will insist I am a corporation or a business because I will have up to 20 units in 4 separate buildings. How do you see my situation?


            The income I make each month from the buildings is added to my support payments and helps with our living expenses.


      Your advice is appreciated. If you want more details I can call you or email. Thank you.





david ingram replies:

1.  The appraisal, legal, trips to xxxxxxxxxxxx to buy and building inspection fees are NOT deductible on your return.  They are all added to the cost of the building and may be depreciated over the years at 4% per year on the diminishing balance.
    In the first year, the figure is 2%. 

2.    Partially answered in '1' above.  In addition, the depreciation figure which is called Capital Cost Allowance on the return can not beused to create a rental loss.  Thereofe, if there was an amount of $6,000 to use as depreciation and your profit was only $3,217.55, you could  only claim depreciation of $3,217.55. You should go to a CRA office and get hold of the renter's guide.  It has the T776 form and the method of claiming CCA.

3.   When you sell the building, the CCA is added back into the rental schedule and you have to pay tax on it at that time.  When you sell, it is important to keep enough out to pay the tax if you are using the money to buy another building. 

The CRA will NEVER call or deem you to be a corporation if you have not physivcally incorporated.  In general, I do not think anyone in your position should be incorporated.

I am happy that the school is helping your son.  An autistic child is a total life situation.  I took someone down to Paul Swingle's yesterday.  A suicidal woman who walked in crying and weeping and walked out laughing with her sound health device and detailed instructions which did not involve any drugs.  While there, the Koreamn lady whe was attacked and left in a coma in Stanley Park was wheeled out.  She ws laughing and apparently is now painting, etc.

This was the lady who was considered to be a living vegetable.

You can see that story including the Swingle treatment at:

david ingram �
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US CANADA RRSP distributions for US residents


My wife (57) and I (61), now living in Michigan, both have small RRSPs from our years of working in Canada. Previously I was told that I could do nothing with the money, not move it to an RRIF or even move it within the family of the Investment Company. Now I'm told I may be able to withdraw it in increments of less than 5k for a 10% withholding. If this is possible what are benefits/drawbacks of withdrawing now vs. waiting till retirement? Also, I'm unsure about reporting requirements; I've only just heard about form 8891.

david ingram replies;

Dealing with a Canadian RRSP has become much easier over the years.

You have been dealing with people who are inexperienced in dealing witr non-residents of Canada who live in teh USA.

The minimum/maximum tax for you to pay on the withdrawal is 25%.  If you roll it into a RRIF, the withholding is 15% under Article XVIII of the US Income Tax treaty.

You should have been filling out form 8891 or its equivalent under 89-45 since 1989.  Thankfully, the IRS and treasury have not been enforcing the onerous penalties associated  with non-reporting  (35% of the principal PLUS 5% per  year of non-reporting for the 8891 or equivalent and up to $500,000  PLUS up to 5 years in jail for failure to  file form T DF 90-22.1 .

See this older answer
This is not the result of a question but is the result of an IRS Tele-conference on June 20, 2007. 

The subject was the reporting of foreign bank on form T D F 90-22.1.

In particular, the tele-conference made the point that  June 30th  "IS" the deadline and that fines are being increased and in particular, there are / will be severe penalties for non-compliance.

It would seem that there is NOW a $10,000 penalty for failure to file the form although that is in the regulations and not on the form.

I know from other sources that some 1,000 clients of former advisor Jerome Schneider are in the process of  being fined as I write this.

I also admit that I have not worried much about the June 30th filing date in the past.

However, the teleconference made the point that practitioners are subject to fine for not following up on these filings.

As I write this Terry or Phyllis ?? is making it very clear that RRSP accounts must be reported but that the Company Pension does not have to be reported.

So--- if you have not being reporting your foreign accounts - report now.

AND, they also made the point that everyone with foreign accounts MUST file schedule B, even if there is no earnings form the accounts.

AND, they also made the closing  remark that if they have NOT been filed in the past, taxpayers shoiuld file back SIX years.

david ingram �
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Canada selling cabin clear of capital gains tax - Form T2091

I have a home on rural lake property. We purchased the place in 1999 and lived there for 2 years but not since.   Now that we are considering selling and moving on to another location, I wonder waht the impact of capital gains will be? Our friends say that we can defer capital gains by calling the place our permanent residence now.   My accountant has done a capital gains calculation based on the time we have lived there. Because of this, I had planned to move back into the house next spring for approximately one year. Some say that moving back there is not necessary. Is that correct?   Thanks for your time ----------------------------------------------------------------
david ingram replies:

If it is the only jhome you owned, you may claim it tax free for the whole time even though you did not live in it.

If you owned another home, from the time you mioved out, either home can be your tax feee principal residence from 1999 to the present but when you claim one of them tax free, the other is taxable on the amounts calculated on form T2091.

In other words, you can claim either as your tax free residence.  If you do have another house you intend to claim tax free from 2001 to the present, moving into the cabin will not make it tax free for the same time period.
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Canada Immigration to USA - E-5 Investor program - David Andersson - Instant Green Card - DV-2009 Lottery online entry rules


I was wondering how to go about immigrate to the U.S. from Canada. Can you please hope me with any info? Thank you

david ingram replies:

If you ask me, I could write a book. 

*    The easiest way is to win a Green Card Lottery but you cannot enter if born in Canada.

Find out details of the next lottery which starts at noon October 3, 2007 and ends at noon on Dec 2, 2007 at:

Be advised that if you qualify to enter, there is absolutely NO reason to use a service.  You can do it easier yourself and be assured that the documents reached the USCIS because 'you' sent them.

*    The second easiest way is to find an American, marry them, and have them sponsor you.

*    the third is to find a Canadian or American Employer with an office or plant in Canada and work for them in a managerial or supervisory position for a year and have them transfer you to the US on an L1 visa and then sponsor you for a green card.

*    the fourth easiest is to find a US job and get an H1B visa and have the company sponsor you for a green card.

*   The fifth easiest (and fastest to get to live in the US NOW is to find a professional job which qualifies for a TN visa and move to the US, have the company change the visa to an H1 and then  sponsor you for the green card.

*    The sixth is just put in an application and wait about 16 years.

You can find out the different visas available by going to and reading the 'Entering the US' section in the second box down on the right hand side.

 Last but not least, if you have $500,000 to $1,000,000 legally obtained US dollars to invest, you can buy your way in with an E-5 Visa.  this requires a $500,000 investment in areas like Whatcom County on the Washington State / BC  border or $1,000,000 in the larger cities like Seattle LA, Chicago, etc.

The money has to be invested and create 10 permanent well paid jobs for US persons.

If you wanted to do this, I suggest you (and any other interested party) contact David Andersson at (604) 608-0818.  He has an investor plan where you invest your $500,000 US in a Whatcom County project and get an instant US green card.  It is far less risky than starting your own business and  there is a buy out provision down the line.

I will also make the declaration that I believe there is a finder's fee for my recommending  him to you.

There 'is' another E2 investor visa which will let you work in the US but does not allow you to apply for US permanent residency directly.  In the last 25 years, I have only known one person who obtained his US green card while on an E-2 and he had applied (and got in line) for the green card five years before the E-2 Investor visa.  He had the E-2 for nine more years before he came up for the green card through his original application.
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Canada Housing meltdown mortgage woes

In the event of a complete market or housing market meltdown would a small equity loan be likely cancelled in a governmet bailout or would it simply increase with interest as the mortgage companies consolidate?
Thanjks for your time

xxxxxxxxxxx in Vancouver

david ingram replies:

You can expect the financial institution to pursue you for the money plus interest.  Most of the paperwork will leave you owing the money even though the security does not exist anymore.  There is an exception for a lot of mortgages in the Province of Alberta.

In the case of conditional sales contracts for cars, etc., it is generally that the financing company has to make a choice to take the car and call it quits or leave you with the car and sue you for the full amount.  Again, differs with the province and the  terms of the contract.  Read the fine print. �
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US citizen moving to Dubai - form 2350 2555


I and my wife, both US citizens, plan to move to Dubai for 2 years.
We will both be working in jobs over there. We have a house here
which we would like to keep. What are our tax implications? How
much tax would we pay on an estimated combined income of $250,000
US per year? What would change if my wife quit her job - annual
income would drop to $150K. We also own a startup business in the
US which we expect to keep going and generate some income. How
does this impact us? What would you suggest is the best way forward
in our case? What services can you offer - we are in Austin TX.

Would greatly appreaciate a response. Thank you in advance for
your time.


david ingram replies:

Your wife and yourself  will be tax free on up to about $82,400 (may be indexed for 2007) prorated over the number of days you are out of the US provided you are out of the USD for a full calendar year or 330 out of 365 days.  To claim this exemption, you both must file from 2555 which you can see at:

The instructions are at:

We would be happy to look after your out of Country US returns.

If your wife quit a $100,000 a year job, you would be out the $100,000 less about $22,000 income tax (on a prorated averaged basis).

You would still be taxable on the $150,000 less the $82,000 exemption.

Another problem if your wife does not work is that she may spend too much time in the US and you 'could' lose your exemption if you are not careful because you will want to join her. 

To allow you to be out of Dubai for more than 30 days in 365,  it is better to claim the bonefide residence provision than the 330 out of 365 days exemption.  If you file form 2350 to extend the filing of your return, you can claim the bone fide residence for all years provided you are officially in residence in Dubai for a full calendar year meaning from Jan 1 to Dec 31st.   The way the system works for  instance is that being an official Dubai resident from jaqn 1 2008 to Dec 31 2008 woul dallow you to use Oct Nov and Dec of 2007 and Jan to Sept 2009 as exempt time.  However, to qualify the two or thgree months in 2007, you have tio file form 2350 which you can find at.

You will have a problem finding someone locally who truly understands these forms.  If you decide that I am too far away, Gary Gauvin in Rockwall, Texas is my old business partner in Ottawa, Canada and very experienced in out of country return. His phone number is (469) 273-3399. His web-site is and if you go to google and type - income tax expert -  into the search engine, he and I are usually in the top five.

If you type -  US Dubai Income Tax Expert - you will be amazed.  At any one time, I usually have 20 or 30 clients in Dubai so you would not be alone.

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OOPS Canadian wants to buy a cheaper house in Washington State and commute to work in Canada

A reader wrote David,

   I think you missed one elegant exception, if the folks get a work permit (J1, H1B, L1, TN-1)  for the US I believe that they are entitled to live there. I believe there is thus an elegant loop hole, obtain a TN-1 (renew every year) and live in the US, perhaps take an appropriate part-time job in the US (I’m a Green-Card Canadian in Bellingham that has an IT consulting company,  having some experience folks handy for part time work at favorable rates is always a nice prospect for me).

The issue of BC medical and tax jurisdiction may be a touch complicated. The person may be in Canada 5/7 days of the week but sleeps in the US 7/7 days --- but that’s your expertise.

david ingram replies:

I agree that I did not mention the working visa routine because the lady wants to work in Canada and to live in the US, they must have a job in the US.  Then, If the job goes south, the person must move back to Canada. 

One could get a TN visa for one day a week and that 'would' allow them to work in the US.

However, they must be in a professional level to qualify for the TN. 

They can read the details of all the cisas by going to and reading the 'Entering the USA' section in teh second box down on the right hand side.

H1 visas take a long time to get at the moment and although transferrable, are rarely issued for part-time work. 

The person in question would be paying full Canadian tax and NOT qualify for their provincial medical because they do not sleep (live) in Canada. 

She could also get her employer to open a US branch and transfer her there on an L1 for a day a month and commute back to Canada for the rest of the time.

A student visa would also work.  I know one couple who spent ten years in the USA on his student visa and then forced back to Canada.  They even had four US born children.  However, any of these solutiions are NOT very practical.  better she should change boy friends and marry an American.

I likely should have included this older question at the start

Hi there,   I'm a Canadian Citizen living in New Westminster. I cannot afford to buy a house in this area (Lower Mainland). I have found some affordable properties south of the border, in Blaine and surroundings. >From a financial and commuting standpoint, it makes perfectly sense to buy a property there, and commute daily to my job in Vancouver. But I have no ideea what the legal implications would be, on both sides of the border. Would you please tell me if it makes sense, from a legal point of view and if possible at all?   Thank you very much.   --------------------------------------------------------
david ingam replies:

Unless you are an American citizen and / or married to a US citizen or marry a US citizen who will sponsor you to live in the US, it is out of the question.

Nothing stops you from buying a house in Blaine and spending Friday Sat and Sun night every week and keeping an apartment in Vancouver for the four nights a wek (have to be in Caanda more than the uS for US border trules and BC Medical) but you can't be sleeping in the US every night or living in the US without a 'live there' visa and there is not any 'live there' visa.

And if you can afford the Blaine House, the commuting gas AND the Vancouver Apt, you can likely really afford to buy something smaller in the lower Mainland.

If yiu could get a US employer to hire you as a management consultant or scientific technician or computer system analyst or librarian, etc., one day a week  in Bellingham, you could get a TN visa which would have to be renewed every year but MC TN visas are hard to get.

The reason for the one day a week suggestion is that you could still work in Vancouver.

The problem is that to live in the USA, visas are only for employees or spouses as a rule.  You can apply for a green card but the last I looked it was over 15 years waiting time.

goto and read the 'Entering the USA' section in the second box down on the right hand side.

Last, but not least, if you do manage to make the move by marrying an American, your BC medical is cancelled because you have to 'live in BC' and 'make your home' in BC to qualify. If you have extended medical benefits at work, they are also cancelled because you need the basic plan to qualify.  To replace a good corporate medical plan in BC will cost you $400 to $600 a month US.

My question is my fiancee lives in Richmond BC and wants to purchase a house just across the border and still work in Canada. She is getting the run around on if that is possible and if so what paperwork does she need to fill out in order to make this happen. She has gone to the american consulate and nobody seems to know anything. We are looking for her to do this asap. Any help or advice you give would be greatly appreciated. Thanks
david ingram replies:

It is not possible to do unless she wins the lottery for a green card or marries an American resident who sponsors her into the US.

She can buy a place there as a vacation or recreation place and spend half of her time there but she needs a full blown residence in Canada to qualify for that.  Her home in Canada has to be (or should be) a better home than the one in the USA. �